Notice that I have attached a video and a direct link to the site that shows you every owner financed/bond for deed home for sale in St. Tammany Parish.
So What Is It? A bond for deed sale is when a home owner buys a house and the seller keeps their name on the deed and title. The home buyer goes on the deed and yes it's recorded. The home buyer receives the tax benefit on the property. The home for sale does not have to be paid off. There is a 3rd party company that is the escrow holder for the buyer and home seller. Buyers pay the escrow company, escrow company pays the sellers mortgage, and the buyers get credit for the mortgage.
How Long Does This Go On For? Bond for deeds are not a permanent loan. They are typically for 2 to 3 years. At that time the buyer receives a tradition mortgage from a mortgage company. The good thing is that the mortgage that the buyer gets will be looked at like a refinance since the buyers name has been on the deed. Plus home buyers have equity since putting down a down payment plus the future increase in home values.
How is Payment Determined? What Do I Need to Put Down? There is an interest rate on the amount that the seller is holding. This is typically 2% higher than the prevailing rate. On January 18 we saw a 5.5% on St. Tammany bond for deed real estate. It's amortized on a 30 year term. Most bond for deed homes are asking for a 10% down payment. The cost to close the bond for deed is paid by the home buyer and the cost is $1,000.
Example of Payment: $225,000 home with 10% down (22,500) $1,520 per month. This includes everything...Principle, Interest, Taxes and Insurance.